Hershey Foods (HSY)

HSY»Topics» BY SIGNING BELOW, YOU CERTIFY THAT YOU HAVE READ THIS AGREEMENT, THAT YOU KNOW AND UNDERSTAND THE MEANING AND INTENT OF THIS AGREEMENT AND THAT YOU ARE ENTERING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY.

BY SIGNING BELOW, YOU CERTIFY THAT YOU HAVE READ THIS AGREEMENT, THAT YOU KNOW AND UNDERSTAND THE MEANING AND INTENT
OF THIS AGREEMENT AND THAT YOU ARE ENTERING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY.

EMPLOYEE

THE HERSHEY COMPANY

By:

/s/ Thomas K. Hernquist

By:

/s/ Burton H. Snyder

Thomas K. Hernquist

Date:

November 29, 2007

Date:

November 29, 2007

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EXHIBIT A

Thomas K. Hernquist

Lump sum payment

Lump sum payment of 2 times current base salary ($840,000)

Unused 2007 vacation, if any (no payment for carry-over vacation from prior years, and vacation for subsequent years does not accrue)

 Will
be paid with first payroll period of 2008

Status

 Cease to be an officer of the Company December 4, 2007

 Termination of employment and separation from service as
defined under Section 409A occurs on December 31, 2007

 Available for consultation to ensure smooth transition January 1, 2008 through December 31, 2008

 Unpaid leave of absence January 1, 2008 through December 31,
2009

AIP

Will participate in AIP through the end of the unpaid leave of absence period. During the unpaid leave of absence period, AIP is determined as the
lower of actual financial results or target bonus

 2007 based
on actual financial results

 2008 range from $0 - $294,000,
based on actual financial results but not exceeding $294,000

 2009 range from $0 - $294,000, based on actual financial results but not exceeding $294,000

 For clarity, a financial result of 100% of target or higher would result in
a payment of $294,000. The payout for a financial result below target would be the percentage approved by the Compensation Committee for members of the Hershey Executive Team (this is more accurate than the way it was written, as this puts Tom in
the same position for bonuses below target as if he were a continuing employee.)

Benefits

 Health and welfare benefits including medical, dental
and vision coverage will remain in effect as elected until December 31, 2009, the end of the leave of absence period. You will pay the active rate based on the E2 salary band by personal check

 Short-term disability and long term disability benefits will not continue
during the leave of absence period

COBRA Continuation

Will have the option to elect COBRA continuation for benefits at the end of the leave of absence period.

401(k) and pension

Benefit accruals cease upon separation from service, December 31, 2007

SERP

Benefit forfeited; did not meet age 55 vesting requirement

CLRP

Will be eligible for the Compensation Limit Replacement Plan (CLRP), calculated based on accruals up to December 31, 2007, with no accruals thereafter. The CLRP provides retirement benefits on
pensionable earnings that exceed the IRS compensation limit under the Hershey Retirement Account, which was $225,000 in 2007. The CLRP amount will be paid no later than August 1, 2008 with interest at the applicable rate under the CLRP from December
31, 2007 until paid.

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Deferred Compensation

Subject to deferral elections, if any. Change in deferral election permissible under 409A transition rules in accordance with Company procedures.

LTIP

PSU cycle

2003  2005

Will be fully vested on 12/31/08 via the leave of absence

2005  2007

Payout, if any, will be determined after February 2008 Board meeting, based on company performance as determined by Board

2006  2008

Based on company performance, this cycle is not expected to have a payout. Not eligible.

2007  2009

Not eligible.

2008  2010

Not eligible.

Stock option portion

 Existing stock options continue to vest and be
available for exercise through the leave period of absence period, 12/31/09

 Will not receive a 2008 award or future awards

RSUs

Vesting Date

RSUs

6/16/08

1,250

2/28/08

2,500

2/28/09

2,500

All above will vest through the leave of absence period.

Outplacement Assistance

Will be provided in accordance with Company practices

Financial Counseling and Tax Preparation

Will be provided through the leave of absence period at the same level as made available to active employees at the E2 salary grade